JPMorgan, DOJ deal expected Tues.

The Justice Department is expected to announce on Tuesday that it has reached a roughly $13 billion deal with JPMorgan Chase to settle civil investigations into faulty mortgage bonds sold in the lead-up to the 2008 financial crisis, according to a source close to the talks.

It would be the largest settlement ever between Justice and a single company.

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A key stumbling block was overcome in recent days, according to the source, when JPMorgan agreed it would not seek to recoup from the Federal Deposit Insurance Corp. the part of the settlement related to bonds sold by Washington Mutual, which the bank bought in September 2008.

JPMorgan has previously argued that it is shielded from liabilities related to WaMu as part of its agreement with the FDIC, which facilitated the sale of WaMU.

The deal would mark a victory for the Obama administration, which has been criticized for not being more aggressive in pressing cases against Wall Street firms following the 2008 financial crisis. But critics of the administration’s approach have already raised questions over how tough the deal will be when the details are revealed, including whether any of the fine can be used to reduce the bank’s taxes.

A part of the deal was announced last month when JPMorgan settled with the Federal Housing Finance Agency and agreed to pay $4 billion over allegedly faulty mortgage bonds sold to taxpayer-owned mortgage companies Fannie Mae and Freddie Mac. That deal did not cover claims on securities issued by WaMu.

A chunk of the deal, reportedly $4 billion, set to be announced on Tuesday would go toward helping struggling homeowners. This aid would include reducing the amount owed on a mortgage, refinancing a loan into cheaper monthly payments and also razing properties in hard hit areas to reduce the amount of housing blight, according to the source.

JPMorgan has been aggressively trying to settle a slew of investigations by the government into its business practices.

For instance, the bank agreed in September to a $920 million settlement with regulators over the London Whale trading mess, along with separate agreements over credit card and debt collection problems.

JPMorgan’s $9.3 billion in legal bills caused it to report a $380 million loss in the third quarter, its first quarterly loss since Jamie Dimon became the bank’s CEO in 2005. It is now reserving roughly $23 billion for litigation costs.